ECB Watch

spqr64 · **Posted:** Thu Jan 28, 2010 6:11 pm

You are spot on KN, there are a lot of people out there who have very very low rates as a result of borrowing when interest rates were low and their LTV loan to value was also low i.e. less than 50%.
With Nama and dropping values I wonder what would happen if the banks tried to request (because of extenuating circumstances) a revaluation of your property putting you outside the agreed terms and allowing them to force a variable rate on you.
I dont know if they can do this but have you ever read a loan offer from a bank, everything is in it including an Argus catalogue.

yoganmahew · **Posted:** Thu Jan 28, 2010 6:15 pm

sorehead wrote:

Quote:

Ireland has also taken these courageous and difficult steps.

JC presumably isn't aware of Sir Humphrey when using words like "courageous"

http://en.wikiquote.org/wiki/Yes,_Minister

Quote:

[How to guide ministers to making the right decisions]
Sir Humphrey: If you want to be really sure that the Minister doesn't accept it, you must say the decision is "courageous".
Bernard: And that's worse than "controversial"?
Sir Humphrey: Oh, yes! "Controversial" only means "this will lose you votes"; "courageous" means "this will lose you the election".

Actually, I think that is precisely what he means. The ECB is calling on governments to fall on their swords in their efforts to get deficits down.

bob3367 · **Joined:** Dec 17, 2009 **Posts:** 1396

kerrynorth wrote:

I think tracker loan agreement documents will specify the circumstances whereby they can toss you off the tracker and onto the SVR. One of these may be a LTV ratio. Wait until NAMA goes through and then we will see all manner of reasons for kicking people off trackers seeing the light of day.

I have looked into this, and once you pay your mortgage there is nothing that they can do. I asked my solicitor to verify this and she did, the contract was effective on the date we signed, and the LTV based at the time of purchase

Pyramid5 · **Joined:** Mar 7, 2009 **Posts:** 710

bob3367 wrote:

kerrynorth wrote:

I think tracker loan agreement documents will specify the circumstances whereby they can toss you off the tracker and onto the SVR. One of these may be a LTV ratio. Wait until NAMA goes through and then we will see all manner of reasons for kicking people off trackers seeing the light of day.

I have looked into this, and once you pay your mortgage there is nothing that they can do. I asked my solicitor to verify this and she did, the contract was effective on the date we signed, and the LTV based at the time of purchase

Bob, Is this in relation to a specific contract or uniform across all trackers. If the latter is the case, those on SVR's are in for more significant pain.

bob3367 · **Joined:** Dec 17, 2009 **Posts:** 1396

Pyramid5 wrote:

bob3367 wrote:

kerrynorth wrote:

I think tracker loan agreement documents will specify the circumstances whereby they can toss you off the tracker and onto the SVR. One of these may be a LTV ratio. Wait until NAMA goes through and then we will see all manner of reasons for kicking people off trackers seeing the light of day.

I have looked into this, and once you pay your mortgage there is nothing that they can do. I asked my solicitor to verify this and she did, the contract was effective on the date we signed, and the LTV based at the time of purchase

Bob, Is this in relation to a specific contract or uniform across all trackers. If the latter is the case, those on SVR's are in for more significant pain.

Thats a fair question, but from what I understood once you keep your side of the bargain, they legally have to keep theirs, now I'm not underestimating the cunning of banks, but if they were to do this due to falling levels, whats preventing the mortgage holder from applying the same criteria to the out standing amount of the loan?

I feel it would be a legal nightmare, for everyone.

PROFESSORI · **Posted:** Fri Jan 29, 2010 12:06 pm

More denials from Germany of a bailout for weaker countries,I think they doth protest too much.The ECB is going to bailout every bankrupt government and bank in the EU(apart from the UK).The words of the German minister in the article sound about as convincing as the dreaded vote of confidence given to a football manager by his director.

Quote:

Funds flee Greece as Germany warns of "fatal" eurozone crisis
Germany has triggered a near-panic flight from southern European debt markets by warning that there will be no EU bail-outs, even though it fears the region's economic crisis has turned dangerous and could prove "fatal" for the entire eurozone.

By Ambrose Evans-Pritchard
Published: 8:14PM GMT 28 Jan 2010

The yield on 10-year Greek bonds blasted upwards by over 40 basis points to 7.15pc in a day of wild trading. Spreads over German Bunds reached almost four percentage points, by far the highest since Greece joined the euro, and close to levels that risk a self-feeding spiral. Contagion hit Portuguese, Spanish, Irish, and Italian bonds.
George Papandreou, the Greek premier, said in Davos that his country had been singled out as the weak link in a "attack on the eurozone" by speculators and political foes. "We are being targeted, particularly by those with an ulterior motive."

Quote:

However, a key trigger yesterday was testimony in Germany's parliament by economy minister Rainer Brüderle, who said there would be "no bail-outs" for struggling debtors and no move to a "European economic government".
"A few European nations are exhibiting dangerous weaknesses. That could have fatal consequences for all countries in the eurozone," he said. Despite the warning, he said each country must solve its own

"no move to a "European economic government"? I thought that was the whole point of the EU,total economic and political control of Europe by one bank and one puppet government run by same bank!!!

So two massive porkies there that show the true intentions of the ECB
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7095818/Funds-flee-Greece-as-Germany-warns-of-fatal-eurozone-crisis.html

yoganmahew · **Posted:** Thu Feb 04, 2010 6:14 pm

No change from the ECB today. Some new language from JCT:
http://www.ecb.int/press/pressconf/2010 ... 04.en.html

Quote:

The prevailing interest rate constellation continues to have a strong influence on both the level and composition of annual M3 growth. On the one hand, the low rates of remuneration on short-term bank deposits foster the allocation of funds away from M3 and into longer-term deposits and securities. On the other hand, the narrow spreads between the interest rates paid on different short-term deposits imply a low opportunity cost of holding funds in the most liquid components included in M1, which continued to grow at a robust annual rate of more than 12% in December.

The zero annual growth rate of bank loans to the private sector reflects a further increase in the growth in loans to households, while the annual growth in loans to non-financial corporations moved further into negative territory. Such divergence remains in line with business cycle regularities. The ongoing contraction in the outstanding amounts of loans to non-financial corporations continues to be accounted for entirely by a strong net redemption of loans with a short maturity. For the sector as a whole, the overall contraction may be due partly to substitution with market-based financing.

bob3367 · **Joined:** Dec 17, 2009 **Posts:** 1396

I see the Portuguese CDS widened to more than 200 bps, for the first time today.

the edge · **Joined:** Sep 25, 2007 **Posts:** 2026

kerrynorth wrote:

I think tracker loan agreement documents will specify the circumstances whereby they can toss you off the tracker and onto the SVR. One of these may be a LTV ratio. Wait until NAMA goes through and then we will see all manner of reasons for kicking people off trackers seeing the light of day.

Pure speculation.

Larry · **Joined:** Jun 28, 2008 **Posts:** 1691

yoganmahew wrote:

No change from the ECB today. Some new language from JCT:
http://www.ecb.int/press/pressconf/2010 ... 04.en.html

Quote:

JCT's new language

Could you point out the bits of new language to us financial illiterates? To the untrained ear his remarks sound like there isn't a lot of money around, which I believe in turn means inflation is not an imminent threat.

yoganmahew · **Posted:** Thu Feb 04, 2010 8:13 pm

Larry wrote:

Could you point out the bits of new language to us financial illiterates? To the untrained ear his remarks sound like there isn't a lot of money around, which I believe in turn means inflation is not an imminent threat.

This bit:

Quote:

On the one hand, the low rates of remuneration on short-term bank deposits foster the allocation of funds away from M3 and into longer-term deposits and securities.

I take to mean that low rates are causing low usage of money. Later he says very short money abounds. So low rates are grinding usage to a standstill (as proxied by M3), but that everyone expects him to raise rates at some stage (hence the very short money up by 12%).

I like to think I'm still this side of illiterate, but others more literate have said the language hinted at raises later in the year. This is all I could find that looked new to me.

I think it is more "bollox, the shit is still dripping on the fan and low rates haven't worked. Money is being slapped into all sorts of mad schemes as a result. We can't feckin' go through this again. So even if it is not required by the economy, I'm going to raise rates. Only the peripherals care and then only the Irish and the Spanish. Once the euro collapses in value I'll be free to do it..." Or somesuch!

Larry · **Joined:** Jun 28, 2008 **Posts:** 1691

^ TY YM. I see that a bit clearer now. What are the "most liquid components included M1"? It sounds to me like cash under the mattress just waiting for deposit account rates to go up before depositing said money with the bank...??

yoganmahew · **Posted:** Fri Feb 05, 2010 12:22 am

Larry wrote:

^ TY YM. I see that a bit clearer now. What are the "most liquid components included M1"? It sounds to me like cash under the mattress just waiting for deposit account rates to go up before depositing said money with the bank...??

Eh, overnight deposits, CDs, that sort of thing. I think up to a certain maturity (so including, I suppose, some t-bills? - in which case what JCT is seeing is the desperation of governments...).

the edge · **Joined:** Sep 25, 2007 **Posts:** 2026

Stand by for a shock cut announcement.

The Naked Chef · **Joined:** Jan 30, 2009 **Posts:** 1287

the edge wrote:

Stand by for a shock cut announcement.

U cannot be serious. :shock:

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